Provo proves Comcast can offer better service at a lower price when there’s no other choice


Comcast’s patron saint.

You can get much farther with a kind word and a gun than you can with a kind word alone.”
Al Capone

Comcast guards what it considers to be its turf with a ferocity that makes a Chicago gangster look like a social worker. Now, it’s putting a move on Provo.

As Utah broadband blogger Jesse Harris tells it…

I spoke with one of their sales guys who confirmed that Comcast will be offering a package of 250Mbps/50Mbps for $70 starting in September, but only in Provo. (Sorry, everywhere else.) This is in direct response to Google Fiber coming to town and will include a new modem with a built-in 802.11ac router to take advantage of the speed bump.

Whether 250 Mbps for $70 comes true or not, Comcast has already turned up the competitive pressure in Provo, meeting Google Fiber head on. Last month, it floated a $120 package that combined a solid TV package and 105 Mbps Internet with a choice of either telephone or home security service. That’s Google’s price point for just a decent enough TV package and a gig of Internet.

Comcast clearly wants to lock customers into multi-year contracts before Google has a chance to fire up its service in Provo. But throwing voice or home security onto the table is enough to kill the gigabit buzz. Whether it’s 105 or 250 megs, let along a gig, it’s more than the vast majority of households need, want or use right now. Trading bandwidth you don’t use for phone or security service is a no brainer.

Google has the speed, flexibility and resources to whack Comcast, if it wants. No need to waste tears.

Muni and small independent networks, though, that have gone up against Comcast’s total war and big lie tactics haven’t done as well. Comcast can afford to bleed profusely in a handful of its markets, if it means warning off risk averse competitors. The only choice left to the community networks it targets is whether to stand their ground and die quickly, or back down and strangle slowly.

It’s a choice Al would applaud.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems.

His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California.

Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.

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  • Wonder when Google will:
    1) open layer 1
    2) add corporate/institutional VPN revenues
    3) add wireless backhaul and offload revenues
    4) add ad sponsorship revenues
    5) license its fiber model to Muni’s and create investment pools with VCs/PE to make it national quickly
    6) license its video headend, internally developed components and provide low-cost WAN scale to Muni’s and competitive service provider franchisees?

    Seems like that’s the way to defeat good ol Al.

    • Ultimately, I think the answer to those questions will come when Google decides (and I don’t they have yet) whether it wants to be in the telecoms game itself or if it just wants to disrupt it sufficiently to get it moving in the big, fat, cheap pipe direction it’s advocating. If Google wants to be a telecoms player, it’ll be reluctant to open up layer 1 and let others use the IP it’s developed.

      If I were to bet though, I put my money on Google doing just as you suggest, once it controls enough assets to make a difference. At that point, I’d expect them to make the IP open source and work to bring down wholesale bandwidth prices to layer 1-like levels. To go any further, the Googloids would have to buy a company like Level 3 or Zayo or similar. Which they could do if they really wanted to.

      • Steve, you and I agree on many things, but please remove “dumb pipes” from the lingo. No thanks go out to David Isenberg who cast aspersion in a big way on the lower layers in the late 1990s while he was at AT&T. Layers 1 through 3 are anything but dumb and the tradeoffs, change and evolutions both horizontally and vertically is constant. In fact the amount of change going on in layers 1 and 2 technically is incredible (both wired and wireless).

        There is extremely advanced technology developing driving the cost per bit down at rates that match or exceed both Moore’s and Butter’s laws. Add in the network effect (Metcalfe’s) laws of everyone having gigabit connections everywhere (yes with 802.11ac that’s a reality) and layer 1-2 access will be considered super-smart; and super-cheap on a per bit basis….like 99% cheap. This is no different than what occurred in other areas of the InfoStack in the 1980s-90s that were digitized and made intelligent (WAN voice, data, wireless). But even as the per bit cost/price drops precipitously, the revenue grows 5-25% annually due to demand elasticity.

        Furthermore, if we start moving a lot more of our economy onto these high-capacity layer 1-2 connection points (telework, telemedicine, tele-education, etc…) the owners of these high-definition VPNs will want redundancy and backups, ensuring many layer 1-2 providers competing against each other with their incredibly “smart pipes”. Henceforth, let’s use the term smartpipes!

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